Scottish hedge fund manager Hendry calls time on Eclectica

Reuters Staff

3 Min Read

LONDON (Reuters) - Scottish hedge fund manager Hugh Hendry, famed for his combative style, is shutting the fund he founded 15 years ago after two back-to-back years of losses, according to a letter to investors seen by Reuters.

“Unfortunately, we have made the difficult decision to close the Fund,” Hendry said in the letter. “We would very much like to thank you for your support during the last 15 years.”

At its peak in 2013, Eclectica Asset Management had $1.3 billion (970 million pounds) in assets under management, before several years of outflows coinciding with flat to negative performance brought total assets down to under $200 million.

The fund lost 9.4 percent in the first eight months of 2017, after a drop of 4 percent in 2016. Over the past two years, Hendry has made bets on German residential real estate and the break-up of the European Union.

Hendry, known for his outspoken style, once said to Nobel Prize-winning economist Joseph Stiglitz during a BBC Newsnight discussion about the Greek financial crisis: “Hello. Can I tell you about the real world?”

After launching the Eclectica Fund in 2002, Hendry rose to fame with returns of 50 percent the following year and gains of more than 30 percent in 2008 at the height of the global financial crisis.

In his parting comments, Hendry said his team felt their thesis of a healing global economy was till slowing playing out but the fund had suffered from short-term hits.

“For the first time in an age all parts of the world are enjoying synchronised economic momentum and I can’t see it ending for some time,” he wrote.

“It’s just that our substantial risk book became strongly correlated over the short term to the maelstrom of President Trump and the daily news bombs emanating from the Korean Peninsula; that and the increasing regulatory burden which makes it almost impossible to manage small pools of hedge fund capital today.”

Hendry’s firm made 6.1 percent in 2015 and 9.5 percent in 2014 after a flat year in 2013 and a loss of 1.7 percent in 2012, the letter said.